Last Updated:August 25, 2025, 15:59 IST

RBI Governor Sanjay Malhotra says India rebounded strongly after the pandemic, recording a compound annual growth rate (CAGR) of nearly 8% over the past four years.

RBI Governor Sanjay Malhotra. (File Photo)

Reserve Bank of India (RBI) Governor Sanjay Malhotra on Monday praised the resilience of the Indian economy, saying its achievements in recent years are “undoubtedly very creditable and widely recognised”, despite facing unprecedented challenges.

Speaking at the annual FIBAC conference, jointly organised by FICCI and the Indian Banks’ Association (IBA) under the theme ‘Charting New Frontiers’, Malhotra said the economy has expanded significantly and remains a symbol of “resilience and hope”.

He highlighted that India rebounded strongly after the pandemic, recording a compound annual growth rate (CAGR) of nearly 8% over the past four years. The International Monetary Fund, he noted, projects India to remain among the world’s fastest-growing major economies.

“We are all set and projected to be the third largest economy in the coming years,” he added.

On inflation, the Governor observed that the average rate has been much lower in the last decade, particularly after adopting the inflation-targeting framework, averaging 4.9% per annum.

He emphasised the stability of the external sector, pointing out that the current account deficit stood at just 0.6% of GDP last year, supported by robust service exports and record inward remittances, making India the top global recipient. Foreign exchange reserves of $695 billion cover around 11 months of merchandise imports.

Malhotra attributed these strong fundamentals to a mix of prudent fiscal and monetary policies, structural reforms, major investments in infrastructure, better governance, and gains in productivity and competitiveness.

On regulation, he said the RBI aims to strike a balance: “Regulations provide the necessary friction to promote financial stability and safeguard depositors’ money. However, excessive regulation could impede growth. The art of regulation-making lies in finding the right balance between safety and growth, the right amount of friction, in other words. Pursuit of this balance or optimal regulation has always been our constant endeavour in the RBI.”

On US Tariffs

The RBI governor also said the central bank will step in with additional policy measures if the recently imposed 50% US tariffs become effective this week.

“We have provided ample liquidity to the banking sector and whatever else is required to support the growth of the economy and including those of sectors which are impacted more. If it so happens, we will not be found wanting in our job,” said Malhotra.

He emphasised that while anchoring inflation has been a key priority, the central bank has “not lost sight of growth amid uncertainties”.

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